Court Reminds Tennessee Plaintiffs to Be Careful When Signing Releases

Typically during the settlement of claims between a plaintiff and a defendant, the defendant will want assurances that the plaintiff will not turn around and sue him or her again for different types of related claims, or otherwise continue to drag out litigation after a settlement is reached. In order to create these assurances, parties will usually sign what is known as a release.

A release essentially gives up outstanding claims that a plaintiff may have, whether known or not known at the time. Releases can be narrowly limited to the exact facts of the case or more broadly construed to cover any possible claims a plaintiff may have. While releases are often a normal part of the settlement process, they must be treated very carefully, since a plaintiff can easily and unwittingly give up more than he or she intended. This is illustrated in a recent Tennessee personal injury case before the Tennessee Court of Appeals.

In this ATV accident case, L.J. was a passenger in an ATV accident and was severely injured. The driver of the ATV, L.S., was killed in the accident. L.J. alleged that the accident was a result of negligence on the part of L.S. and brought a claim for medical bills and personal injury against L.S.’s estate in probate court. L.J. also filed a lawsuit against the personal representative of L.S.’s estate. At the time, L.J. also had uninsured motorist coverage through Geico, and Geico was added as a party to the lawsuit. The estate subsequently settled with L.J., offering her a semi truck that had been owned by the defendant, which was sold and of which L.J. received the profits.

As part of the settlement, L.J. signed a release acknowledging full satisfaction of her claim and stating that she released any further claims that she had against L.S.’s estate. Geico was not involved with the release and was initially unaware of its existence. After Geico learned of the release, it moved for summary judgment in the lawsuit, arguing that since the release gave up all of L.J.’s remaining claims, L.J. no longer had any claims to pursue against Geico. The lower court agreed and dismissed the case. L.J. appealed.

On appeal, L.J. argued that the release that was filed in the probate case was not intended to have any affect on the tort case and certainly was not intended to release any claims L.J. might have against Geico. However, Geico argued that as the uninsured motorist carrier, it stood in the shoes of L.S. and L.S.’s estate and was required to pay for benefits they might not otherwise be able to pay. When L.J. released her claims against L.S. and his estate, she also released her claims against Geico.

The appeals court noted that L.J. could have crafted a more limited release that preserved her tort claims or possible additional claims involving Geico, but she failed to do so. Instead, she executed a very broad release that acknowledged full satisfaction and release of all of her claims. This release prevented her from moving forward with any other claims related to the accident.

This case illustrates the dangers of a broad release and the unintended consequences that it can have for parties who don’t fully comprehend the extent of the document that they are signing. While a settlement in a case is typically a good thing, parties do not want to unnecessarily give up other rights that they may have.

For this reason, it is always important to involve an attorney in your lawsuit, and in possible settlement negotiations. An attorney can help you carefully review documents, including releases, that you may receive and make sure that your rights are not being unnecessarily compromised.

Tennessee personal injury attorney Eric Beasley is committed to settling cases for clients in a way that preserves their rights and protects them from future losses. For more information on seeking compensation for your damages, contact the Law Office of Eric Beasley today at 615-859-2223.